LME Zinc to Grow on Short-Covering (2016-3-2)

Market focus this week include: the annualised reading of new housing starts in the United States in August, the initial value of the manufacturing PMI in the Eurozone in September, and the initial value of the Markit manufacturing PMI in the United States in September; China's one-year loan market quotation interest rate as of September 22. In terms of events, FOMC will announced the interest rate resolutions this Thursday; the Fed Chairman Powell will hold a press conference; and the European Central Bank will announces an economic bulletin.

Zinc prices maintained upward momentum in 2017, thanks to the fundamental story. LME zinc refreshed a 10-year high, and SHFE zinc jumped above 27,000 yuan per tonne, up over 20% so far this year.

OPEC will release monthly crude oil market report today.

One zinc smelter in South China began maintenance cycle due to transformer and device reasons.

Many zinc traders contributed the surge in zinc market mainly to two factors, 21st Century Business Herald reported. 

The price spread between domestic and imported zinc has narrowed recently, SMM noted.

Spot premiums on #0 zinc in Guangdong shrank from 800 yuan per tonne early in the week to 100 yuan per tonne on June 23.

LME zinc has outshined other nonferrous metals recently due to well-behaved fundamentals. Falling visible and invisible zinc inventories have given a boost to LME zinc prices.

Spot premiums on #0 zinc in Shanghai expanded 210-300 yuan per tonne from last Friday to an all-time high of 1,160-1,300 yuan per tonne over July zinc on the Shanghai Futures Exchange (SHFE) June 12,

Zinc prices are expected to weaken in the coming week, SMM foresees.